The Pros and Cons of Affiliate Management Agencies

Michael Garrity

Posted on 3.27.2012

In the world of affiliate marketing, there is often a
clear difference between highly successful “super affiliates” and those who are
just starting out. Like any industry, there is a learning curve for affiliates
as they begin to better understand its best practices, usually through a
process of trial and error.

After all, becoming an accomplished affiliate marketer
requires a lot of time and maintenance, and unfortunately some upstarts just
don’t have the resources to succeed. However, as always happens, a solution
emerged in the form of affiliate managers.

Affiliate managers have a number of responsibilities, but
are mainly tasked with running a merchant’s affiliate program, which includes
everything from recruiting affiliates to establishing incentive programs,
creating media, reporting on sales and paying the affiliates. By providing this
type of assistance on behalf of the advertisers, affiliate managers streamline
the process for marketers and maximize their opportunities by significantly
cutting down on this trial and error process. This can be especially useful for
up-and-coming affiliates.

As of late, with the influx of merchants looking to
advertise on the Web and the constant changes that can take place in Web
marketing, many advertisers don’t have the ability to offer their own affiliate
manager and can place too much of a burden on the affiliate marketer to pick up
the slack, and that typically doesn’t end well for anyone. Enter affiliate management
agencies, third-party organizations that work with merchants to run affiliate
programs and handle all of the responsibilities typically assigned to affiliate
managers.

But, is it worth it
for an affiliate marketer to use a management agency? Let’s look at the pros
and cons:

ProsFor affiliate marketers, there are some good reasons for
working with an affiliate management agency, the most obvious of which is the
amount of time and resources that it saves. Because these agencies have
pre-established connections with various merchants and advertisers of varying
sizes and from various industries, it’s much easier for a marketer to find a
partner and get started working with them. Plus, because they have experience with
both merchants and marketers, agencies will be able to help direct an affiliate
to those advertisers with whom they will likely have the most success.

Since these agencies are, themselves, pretty easy for
affiliates to find, and since they’re always looking to expand their base of
affiliate partners, it really cuts out a lot of the initial work for marketers
(especially new ones) with regards to establishing contacts and getting started
with a program, which can often be the hardest part of the process. Agencies
help by ensuring that any requirements placed on both merchants and marketers
are sorted out beforehand.

Moreover, these agencies are useful because managing affiliate
marketing programs is all they do. When advertisers do have affiliate managers
on their payroll, they’re often in charge of managing all of the affiliate
partnerships that the company handles, in addition to other responsibilities.
This means that even a small team of people can have trouble managing all of
these programs, depending on their size.

Agencies are entirely dedicated to getting the most out of
every account and have multiple people involved with that single goal in mind.
They will also be more flexible in terms of providing an affiliate support when
it’s needed, as in-house managers tend to work a regular, fixed schedule.
Agencies, on the other hand, can have people on-call at all hours of the day to
provide assistance as a problem presents itself.

ConsThe biggest issue with affiliate management agencies is that
they’re just that, agencies. This means they run like well-oiled machines,
which is obviously good for efficiency and suitable for most situations, but
also means they lack a personal element. Most operations are very routine with
an agency and they often lack in the ability to customize a program.
Furthermore, in-house affiliate marketers should be more familiar and
interested in their particular industry, as opposed to agencies that dabble in
a wide variety of industries, and can thus be more helpful and supportive when
an affiliate has specific questions about the field.

The other obvious downside to using a third-party
affiliate management agency is the cost. These companies either charge a
nominal fee or take a performance percentage of an affiliate’s earnings; and
either way, it costs noticeably more than partnering with a merchant who has an
in-house affiliate manager.

As an affiliate, the choice to decide whether or not to use
a management agency to find your program is yours. There are obviously many
advantages, namely that these agencies can partner you with a suitable program
and you have the assurance of knowing that it is being managed by professionals
dedicated to that one task. On the other hand, you’ll largely be sacrificing the
personal connection between you and the merchant.